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Wednesday, 26 August 2015

Some macro and related thoughts today

Some macro and related thoughts today...

China – the rate cut medicine has not really had any effect today (but anything is possible into the close). And note that historically rate cuts have had a pretty mixed effect as per this chart from @FastFT:

Meanwhile the Xinhua news agency says that ‘global economic growth cannot rely on them (China) alone…calls on Japan and Europe to make more effort to boost world economic growth’and the PBoC Chief Economist said that ‘Foundation Of Economic Recovery Not Solid’ and ‘Financial Market Volatility May Effect Economy’. I wonder which one influenced the interest rate cut more?!

Talking about the PBOC here is Central Bank Governor Zhou on the front page of one of the Hong Kong papers today:

(h/t @fion_li)

Still sentiment rose with the China Westpac-MNI Consumer Sentiment (Aug): 116.5 (prev
114.5). And it is not only consumer sentiment going up as @Callum_Thomas noted:

So maybe we are just at a sentiment low...certainly feels stock level opportunistic.

Active management – ‘some 68% of actively managed
funds in the UK all companies sector have outperformed the best-performing
tracker’ during the last three months (via today’s FT). Good news.

Greece election/politics latest - Former Greek
negotiator Houliàrakis is said to become interim Finance Minister due to his
experience w the bailout MoU & the Troika. Greece State Min Flambouraris
says Varoufakis will not be included in Syriza ballot lists. "No one is
inviting him"

Russia - Gross domestic product in the world’s
largest energy exporter will fall 3.3 percent in 2015 before rebounding as much
as 2 percent in 2016, Economy Minister Alexei. The ministry had earlier
projected a 2.8 percent contraction followed by 2.3 percent growth (link here).

Emerging markets – on a risk-reward basis
China/Greece next to each other and mid-pack! (link here).

Finally possibly the most important chart – bonds are always more insightful?! Volatile times await still (but perceive good stock picking / position selection scope)